The 2010-11 general budget today provided considerable relief to income tax payers by raising the slabs at two levels but hiked the central excise duty on non-petroleum products across the board from 8 to 10 per cent and the basic duty on crude and petroleum products besides effecting a one-rupee increase per litre on petrol and diesel.
The basic threshold limit for income tax exemption will remain at Rs 1.60 lakh. Under the new proposal, 10 per cent tax will be levied between Rs 1,60,001 and Rs 5,00,000, 20 per cent on incomes between Rs 5,00,001 and Rs 8,00,000 and 30 per cent above Rs 8,00,000.
The present income tax slabs and rates are 10 per cent for income between Rs 1,60,001 and Rs 3,00,000, 20 per cent for income between Rs 3,00,001 and Rs 5,00,000 and 30 per cent for income above Rs 5,00,001.
Proportionately, similar changes have been made in the taxes related to women and senior citizens aged above 65 years. Mukherjee also gave another relief to individual tax payers by raising the existing limit of Rs 1,00,000 on tax savings by an additional amount of Rs 20,000 for investments in long-term infrastructure bonds. Contributions to Central Government Health Scheme (CGHS) have also been allowed as deductions within the overall ceiling for tax rebate besides contributions to health insurance schemes which are currently allowed as deductions under the Income Tax Act.
For the first time during any Budget presentation, opposition MPs on Friday walked out of the Lok Sabha in protest against finance minister Pranab Mukherjee’s move to increase excise duty by Re 1 per litre on petrol and diesel.
The budget also raised the specific rates of duty on portland cement and cement clinker. The basic duty of 5 per cent on crude petroleum, 7.5 per cent on diesel and petrol and 10 per cent on other refined products is being enhanced.
Taking into account the concessions and measures to mobilise additional resources, the overall revenue gain is estimated to be Rs 20,500 crore for the year.
Total expenditure is placed at Rs 11,08,749 crore, which is an increase of 8.6 per cent over the total expenditure in Budget Estimates of 2009-10. The plan and non-plan expenditures in Budget Estimates in 2010-11 are estimated at Rs 3,73,092 crore and Rs 7,35,657 crore respectively.
The Service Tax net is being expanded to include domestic and international air journeys of all classes, health check-up undertaken by hospitals for employees of business entities and health services provided under health insurance schemes offered by insurance companies. “The finance minister has done a right mix of estimating the growth requirements and at the same time building in it a certain amount of moderation on the price front,” said Manmohan Singh, who has himself presented five budgets in the past.
“He has done a commendable job,” he said.
BJP to move cut motion
After staging a walkout from the Lok Sabha in protest against an “inflationary” Union Budget, BJP on Friday said its members would oppose it when put to vote and would move cut motions.
“We are going to oppose the Budget. Cut-motion is a prerogative available in Lok Sabha and we will definitely bring it to censure the government on its anti-people policies,” senior BJP leader and former finance minister Yashwant Sinha said. He asserted that though there were several announcements in the Budget which were “anti-people”, when finance minister Pranab Mukherjee announced customs duty on petroleum products “he crossed the limit of tolerance of the people” and the party “spontaneously” decided to stage a walkout.
When asked if staging a walkout against the Budget was against Parliamentary propriety, Sinha said one such propriety has been broken by Prime Minister Manmohan Singh who has not become a member of Lok Sabha for the last six years.
BJP maintained that if it were to present the Budget, it would not have touched petroleum prices and “hastened slowly”.
Sinha said increase in prices of petrol and diesel by almost the same amount is a “fundamentally flawed approach” as increasing diesel prices had a high cascading effect. “Diesel is used in the transport (people and goods) sector, by the farmers and also in factories,” he said.
Agriculture, rural development, health and education should have been the priority areas for Mukherjee, Sinha said alleging that the finance minister had sprinkled resources thinly over several sectors.